On Friday, Feb. 20, 2026, the U.S. Supreme Court issued a landmark decision holding that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unconstitutional. In a 6–3 ruling, the court concluded that IEEPA doesn’t provide the president with authority to impose broad-based tariffs, reaffirming that the power to levy tariffs rests with the U.S. Congress. As a result, the “reciprocal” and “fentanyl/trafficking” tariffs imposed under IEEPA were invalidated. Shortly after the court issued its order, the White House issued an executive order ending collection of the IEEPA ad valorem duties. Collection of the duties will end by midnight Eastern Standard Time on February 24.
The ruling immediately eliminates the legal basis for IEEPA tariffs, but importantly, the decision doesn’t affect tariffs imposed under other statutory authorities. Trade measures that aren’t directly tied to IEEPA ad valorem duties but remain in effect and unchanged at this time include Section 301 of the Trade Act of 1974 (Section 301) tariffs (including those on Chinese-origin goods), Section 232 of the Trade Expansion Act of 1962 (Section 232) tariffs (such as those on steel, aluminum, and certain automotive products), and de minimis duties under the Tariff Act of 1930.
With respect to refunds, the court’s decision appears to apply retroactively, potentially allowing importers to seek refunds of IEEPA tariffs previously paid. While estimates suggest that a significant amount of duties could ultimately be refunded, the Supreme Court didn’t outline a specific refund mechanism. U.S. Customs and Border Protection (CBP) has not yet issued formal guidance, and additional clarification is expected regarding the timing, process, and documentation requirements for refund claims. Companies planning to seek refunds should start preparing documentation for payments related to IEEPA tariffs. Thorough records will be necessary once the refund process is clarified.
In response to the ruling, the Trump administration acted quickly to preserve tariff pressure through alternative legal authority. Concurrent with the White House announcement of the termination of IEEPA-based tariffs, it issued a proclamation imposing a 10% temporary import surcharge under Section 122 of the Trade Act of 1974 (Section 122). A day later, the president announced via the Truth Social platform the surcharge would be raised to 15%; however, as of the date of publication of this alert, a revised proclamation or order has not yet been issued. This Section 122 tariff is authorized for a maximum duration of 150 days, unless extended by Congress, and is intended to replace the invalidated IEEPA tariffs in the near term. The new Section 122 tariff begins being paid starting at 12:01 a.m. Eastern Standard Time on Feb. 24, 2026. There are certain exemptions to the Section 122 tariff. It won’t apply to articles listed in Annex I and Annex II of the proclamation; USMCA-compliant goods of Canadian or Mexican origin; and specific products from countries subject to trade agreements with the United States.
The president also directed the United States Trade Representative (USTR) to use its Section 301 authority “to investigate certain unreasonable and discriminatory acts, policies, and practices that burden or restrict U.S. commerce.” It’s likely that new tariffs will result from these investigations. The USTR plans to conduct the investigations on an accelerated timeline. Current Section 301 investigations relating to Brazil and China will continue.
We’ll continue to closely monitor developments, including CBP guidance on refunds, implementation details related to the Section 122 tariffs, and any further executive or congressional actions. We’ll provide additional updates as more clarity becomes available.
While customs brokers and trade attorneys will likely manage the technical aspects of the refund process, the Plante Moran team is available to provide directional support and assistance, help you understand potential exposure and opportunities, and coordinate next steps as the situation continues to evolve.
